The impact of high costs in Hong Kong

ECA International recently declared Hong Kong (HK) to be the most expensive location in Asia for expats to rent a home, followed by Tokyo, Shanghai and Seoul. But HK isn’t just expensive on the rent side of things. Rental prices for an unfurnished, mid-market, three-bedroom apartment in areas commonly inhabited by international executives in Hong Kong average USD $10,461 per month. This is USD $2,000 more per month than the next most expensive Asian location, Tokyo.

So, it should be no surprise that this article reflects on Hongkongers working in Hong Kong, however living in Shenzhen with a willingness to commute daily in order to live in a larger place. Corporate companies that are relocating employees with families from various locations within China to Hong Kong may face the same challenges where the employee’s housing budgets may not be able to meet the soaring property prices in Hong Kong. In these situations, family dependents often choose to remain in China while the employee working in Hong Kong must commute back and forth periodically from Hong Kong to China to join their family.

Organizations need to make sure that their employees are aware of and compliant with tax and immigration authorities on both sides where there may be a minimum amount of time per year that they need to remain in the country to meet the work permit rules they are holding. We recommend partnering with internal tax departments or external tax partners to guide and map out the do’s and don’ts to their employees in these types of situations. The findings should also note that rents in Shenzhen have also risen quite a bit (double-digits) due to high relocation activity into the city.

{

The phenomenon of Hongkongers moving to Shenzhen is not new. A total of 61,900 Hongkongers had already lived in the southern Chinese city for three months, according to data released by the Planning Department and the Shenzhen Municipal Statistics Bureau in 2009.
Homebuyers from Hong Kong interested in mainland properties also need to keep up with local policy changes and be comfortable with these.
Still, Shenzhen is a more affordable place to live than Hong Kong, in terms of home prices and rental costs, according to Centaline’s Lee, who also said the number of Hongkongers living in Shenzhen now must be much higher than 10 years ago, and that it will increase gradually.